EXHIBIT (d)(2)
September 11, 2002
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Racing, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Championship Auto Racing Teams, Inc.
Dear Xxxxx:
The purpose of this letter is to set forth the understanding between
Championship Auto Racing Teams, Inc. ("CART") and Xxxxxx X. Xxxxxxxx and all
entities directly or indirectly controlled by you as defined by the requirements
of Section 13(d)(3) of the Securities Exchange Act of 1934 as amended (the
"Act").
It is CART's understanding that you currently own 2,205,000 shares of
CART stock, which represents approximately 14.9% of the outstanding shares of
CART based on its currently issued and outstanding shares of 14,718,000
("Current Shareholdings"). It is our understanding that you may wish to
purchase, in block purchases from Xxxxx Xxxxxxxx and his affiliates 1,172,600
shares of CART ("New Shares").
As you are aware, CART has adopted a Stockholder's Rights Agreement
that provides, in part, that certain rights may be issued to the Company's
shareholders in the event that an Acquiring Person acquires more than 15% of
CART's outstanding common stock, or publicly announces a tender offer to do so
or engages in certain other "Change of Control" actions. The Board of Directors
of CART is willing to amend its Stockholder's Rights Agreement to permit you and
your affiliates to acquire New Shares up to 25% of the outstanding common stock
of CART from Xx. Xxxxxxxx provided that, with respect to those New Shares, you
agree to the following terms and conditions:
A. For purposes of this agreement, a "Strategic Transaction"
shall include: (i) the merger, consolidation, sale of
substantially all of the assets of CART to another entity not
controlled by the existing CART shareholders or similar
transactions; or (ii) the solicitation, initiation of a tender
offer as defined under Section 14 of the Act; or (iii) the
solicitation of proxies seeking Board representation or the
removal of any directors or a change in the composition or
size of the Board of Directors of CART; or (iv) the making of
any request to amend or waive any provision of the
Stockholder's Rights Agreement.
B. With respect to any Strategic Transaction, you and your
affiliates agree that, for a period of three (3) years from
the date hereof any New Shares will be voted in accordance
with the recommendation of the then existing Board of
Directors of CART on any such transaction. In addition, to the
extent that the Strategic Transaction includes a proposal,
either by merger,
Xxxxxx X. Xxxxxxxx
September 11, 2002
Page 2
consolidation, sale of substantially all of the assets of
CART, tender offer or otherwise, the result of which would be
that CART common stock or assets are exchanged for other
securities or consideration, then you agree that such New
Shares will be exchanged on the same basis as other common
stock of CART, provided that such transaction is approved by
the then existing Board of Directors of CART.
It is the intention of this agreement to restrict your voting and
disposition of your New Shares consistent with the terms of this agreement, but
not to limit your rights with respect to voting or disposition of your Current
Shareholdings. This agreement shall not restrict your right to sell your New
Shares in the ordinary course not involving a Strategic Transaction.
If this agreement is acceptable to you, please execute a copy of this
agreement and return it to my attention at your earliest convenience. Please be
advised, that the result of this agreement will be that an amendment to the
Company's Stockholder's Rights Agreement will be prepared, filed with the
Securities and Exchange Commission and a press release will be issued advising
CART shareholders that this action has taken place.
If you have any questions, please call me at your convenience.
Sincerely yours,
Championship Auto Racing Teams, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, Chief Financial Officer
The terms and conditions of this agreement are accepted and agreed to this
11th day of September, 2002
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
